Customs, Excise and Gold Tribunal - Delhi
Kerala Electric Lamp Works Ltd. vs Collector Of Central Excise on 8 January, 1987
Equivalent citations: 1987(13)ECR651(TRI.-DELHI), 1987(29)ELT264(TRI-DEL)
ORDER K.L. Rekhi, Member (T)
1. The appellants are aggrieved because their refund claim on account of exclusion of post-manufacturing expenses from the assessable value, relating to the period prior to 30-10-1974 but filed on 30-10-1975, was rejected by the lower authority as time barred under Rule 11 read with Rule 1733 of the Central Excise Rules, 1944.
2. We have heard both sides. The arguments before us were confined to the question of time bar and the merits of the appeal were not gone into. The appellants pressed for the following points only :-
(1) Rule 11, which lays down the period of limitation for refund claims, was a delegated legislation. Section 37 of the Central Excises and Salt Act, 1944, under which the rule was framed, did not authorise making of a rule on the period of limitation. The rule was, therefore, in excess of jurisdiction and rule-making power of the Central Government. The limitation was a very vital matter since it cut into the right of refund of the assessee. The Parliament alone was, therefore, competent to legislate on the period of limitation and such period ought to have been incorporated in the Act itself. The limitation provided for in Rule 11 was of no effect. The Act did not lay down any period of limitation for refund claims. In the absence of a statutory period of limitation in the Act, the common law under the Limitation Act, 1963 would apply.
(2) Assuming that the provision as to limitation in Rule 11 was legally effective, still in respect of the amounts collected without the authority of law or under mistake of law, the limitation of Rule 11 did not apply. This was so because Rule 11 was confined to refund of duty and the amounts collected without the authority of law etc. could not be considered as duty. In the absence of any other provision laying down the limitation for amounts collected in excess, provisions of the common law would apply [reliance on 1986(26) E.L.T. 1001 (Tribunal) - Beverages and Food Products Pvt. Ltd. V. Collector of Central Excise, Calcutta].
(3) Provisions of the Limitation Act could be invoked before the authorities constituted under the Act-[reliance on 1986(25) E.L.T. 867 (S.C.) - Commissioner of Sales Tax, U.P. V. Auriaya Chamber of Commerce, Allahabad].
3. The learned Joint Chief Departmental Representative pleaded in reply as under :-
(1) The Central Excises Act and the Rules were a composite whole. The Rules had been made by the Central Government under the power delegated to it under Section 37 of the Act. Further, in pursuance of the provisions of Section 38, the Rules had been laid before both the Houses of Parliament. Under Section 38, the Parliament had the power to make modifications in the Rules or to declare that the Rules would be of no effect. The rules laid before the Parliament, in respect of which the Parliament made no amendment or declaration as aforesaid, were deemed to have been approved by the Parliament. They were, therefore, no less effective than the provisions of the Act itself.
(2) The authorities constituted under the Act were bound by the limitation provided for in the statute [reliance on 1985 E.C.R. 289(S.C.) - Miles India Ltd. V. The Assistant Collector of Customs].
(3) The provisions of the Limitation Act could not be invoked before the aforesaid authorities [reliance on 1985(22) E.L.T. 327(S.C.) - Sakuru V. Tanaji]. Such a question did not arise for the consideration of the Supreme Court in the Auriaya Chamber of Commerce case cited by the appellants since in that case the Sales Tax Officer himself had proceeded under the Limitation Act and hence Auriaya Chamber of Commerce case is no authority for saying that the Limitation Act could be invoked before the authorities.
(4) Having not claimed deduction of post-manufacturing expenses in the price lists and having not filed an appeal against the price list approval by the Assistant Collector, the appellants were not entitled to agitate the question of deduction of post-manufacturing expenses through the medium of refund claim under Rule 11. [Reliance on 1981 E.L.T. 657 (Madras) - Lucas T.V.S. Ltd. v. Assistant Collector of Central Excise, Madras and Ors.].
4. In a brief rejoinder, the appellants stated that the Madras High Court judgment aforesaid was clearly distinguishable as in that case the Assistant Collector had specifically disallowed the deductions by passing an Order-in-Original and M/s. Lucas T.V.S. Ltd. did not appeal against that order.
5. On careful consideration, we observe that the learned Joint Chief Departmental Representative has well taken the plea that the rules laid before the Parliament in pursuance of the provision of Section 38 had the implied approval of the Parliament. It is a well settled proposition of law that the rules framed by the Competent Authority in terms of a power validly delegated to it under the Act become part and parcel of the Act itself. It is also well known that the Central Excises Act was a bare skeleton and it left the manner of collection of duty to be prescribed by the Rules framed by the Central Government. The assessee's right to refund itself was under the Rules only (Rule 11) till the Rule was substituted by Section 11B of the Act on 17-11-1980. The appellants admitted before us that no Court had declared Rule 11, or any part of it, as ultra vires. In any case, this Tribunal is hardly the forum where an argument could be advanced to say that the Rule should be ignored as being in excess of jurisdiction and rule-making power of the Central Government. This Tribunal can proceed to deal with the matter only on the footing that the rule was a part of the statutory scheme and it had the full force of law. Once that is settled, two specific judgments of the Supreme Court cited by the learned Joint Chief Departmental Representative settle the rest. In the case of Sakuru V. Tanaji, the Supreme Court has categorically held that the Limitation Act applied only to proceedings before Courts and not to proceedings before quasi-judicial Tribunals or Executive Authorities. Further, in the Miles India case, while upholding this Tribunal's rejection of the refund claim on the ground of time bar, the Supreme Court observed that the authorities acting under the Act were bound by the period of limitation provided under the Act and that there was no infirmity in the Tribunal's order. We find that these judgments of the Supreme Court were not noticed by the Calcutta Bench of this Tribunal while recording their order relied on by the appellants and for that reason we beg to differ with that order.
6. Apart from Rule 11, there was no other provision under which the Assistant Collector could consider a refund claim. The refund claim filed by the appellants before the Assistant Collector also could be considered to be a claim filed under Rule 11 only. In filing such a claim, the appellants were bound by all the terms and conditions of the Rule, including that relating to the period of limitation. Since their refund claim was admittedly out of time (filed beyond one year), the lower authority was correct in rejecting it as time barred. We uphold the impugned order and reject this appeal.